(Fixes typographical error in word "rein")
By Martinne Geller
NEW YORK, March 3 PepsiCo Inc's (PEP.N)
Tropicana unit is launching a new high-end line of juices on
Monday with prices to match, even as U.S. consumers rein in
spending on things like dining out and buying nonessential
The new orange juice, called Tropicana Pure Valencia, is
made from the top 3 percent of Tropicana's orange harvest and
will have a suggested retail price of $4.49 for 54 ounces.
The company's standard orange juice, Tropicana Pure
Premium, sells for $3.49 for 64 ounces.
"Consumers are looking for super-premium products ...
exotic flavors ... and to drink juice outside the breakfast
occasion," said Tropicana's marketing director, Ellie Halevy.
Since orange juice is so tied to breakfast, the company is
also selling Indian River grapefruit, pomegranate/blueberry,
peach/papaya/mango and raspberry/acai juice as part of the new
line. Acai is a purple berry native to the Amazon that is said
to be high in anti-oxidants.
Halevy declined to give a specific sales target for the new
line, except to say it would be a "key contributor of growth in
JUICING THE WEALTHY
PepsiCo's current juice portfolio, which includes Naked
Juice and Dole juices in addition to Tropicana drinks, saw
low-single-digit sales declines in the fourth quarter as price
increases hurt sales volume.
PepsiCo, like most U.S. food and drink companies, has
raised prices on many products in the last year in order to
pass on some or all of the increased costs of raw materials
such as wheat, energy, milk, and a host of other items.
Those increases led to a 0.7 percent gain in the food
component of the Consumer Price Index in January, the greatest
increase since an identical one in February 2007.
Consumers usually absorb price increases, but with the
economy on the brink of recession, many consumers are feeling
the pinch as they juggle higher food and fuel costs with lower
home values and resetting mortgage payments.
Halevy said Tropicana is spending over $30 million to
market the new juices, aimed at single men and women aged 22 to
45 who have "a lot of discretionary income."
Those wealthy consumers often have fewer financial worries
than Tropicana's current core customer, which Halevy said is
households with children, run by mothers aged 35 to 54.
Halevy said the company expects people will "trade up" to
its more expensive juices, and perhaps "trade down" in other
(Reporting by Martinne Geller, editing by Gerald E.